This is the fourth installment in a 10 part blog on Microsoft as a practitioner of asymmetric marketing.
4. Market Creation
Like a startup company focused on 'disruptive innovation', Microsoft's enables new markets to emerge. The clone revolution itself was brought about by the perfect storm of easy to integrate PC chipsets, Taiwan-built motherboards and Windows. Hundreds upon hundreds of companies were born and made money for their investors during the upsurge in clone markets in the early 90’s. But here’s a few more markets that Microsoft is helping to create by doing one of the things that successful asymmetric marketers are able to do….think long term.
Tablet PCs: Microsoft has spent more than a decade working on pen-based computing culminating in the launch of Windows XP Tablet Edition. While tablets are still mainly focused on vertical market segments for early adoption, one analyst firm estimates that they will account for up to 3.5% of all notebooks shipped in 2005. My bet is that ‘tablet functionality’ will go mainstream within a few years and become a must-have feature of notebook and small form factor 'ultraPC' systems even if the functionality is only used part of the time. This will create a very big market for pen based software and Microsoft will not be the only beneficiary.
X-box multiplayer gaming: Microsoft’s Xbox is another example of their market creation activity, particularly as it applies to multiplayer gaming over broadband networks. While Xbox is still a market share follower to Sony Playstation, it has already leapfrogged them in online multiplayer gaming. Microsoft sees it as strategic to their long term broadband internet strategy and has already signed up half a million subscribers, many of whom participate in online communities that make the whole gaming business model more viral.
Wearable Computing: Watches from Microsoft? No.... who woulda thunk it. But here they are, complete with a wireless service for personalized information direct to the user’s wrist. This initiative, like the tablet’s pen computing, and the Xbox multiplayer gaming are all about laying the foundation for whole new market segments to emerge over time.
The bottom line is that Microsoft spent about 6.5 billion dollars in R&D in fiscal 2003, and creating new markets is a significant part of that investment. Future asymmetric market leaders reading this weblog should see the above 3 Microsoft market creation initiatives as opportunities for co-evolution and business building. There will no doubt be many more opportunities for entrepreneurism created as the Microsoft .NET web services strategy rolls out over the next few years and new .NET developers come to market.
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